Trump Cracks down on Obama-era Windfall to Castro Regime
June 15, 2017
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Fifty-five years after landing on the beaches of Cuba in an ill-fated attempt to liberate their homeland, the aging veterans of the 2506th Assault Brigade won a very big battle. According to numerous accounts, President Trump’s decision to crack down on trade and tourism that benefits the Castro regime is his way of keeping faith with Cuban-American veterans who endorsed his presidential bid.
Trump’s announcement Friday in Miami takes the first steps toward cracking down on commercial ventures and tourism that aid the dictatorship. It also scuttles efforts in Congress to liberalize travel or arrange taxpayer-financed credit for exports to the debt-ridden government.
Trump’s new policy framework maintains diplomatic relations with Cuba, but it is unlikely that his allies in the Senate will approve the nomination of an ambassador until there are significant changes on the island. In the meantime, it is logical to expect U.S. diplomats to take full advantage of diplomatic privileges to engage with Cubans—including opposition figures—with renewed vigor. According to key dissidents, since the Obama opening, U.S., Latin American, and European embassies have all but ignored them in favor of engaging regime apparatchiks.
The windfall of tourism travel—which the Cuban government says has increased by 75% in the last year—is a primary target. The Obama Administration skirted the law by removing virtually all restrictions on travel; the tourism industry is more dominated than ever by entities linked to the Cuban military. Trump’s plan will restore licensing requirements to ensure that travel is purposeful and structured, falling within one of 12 authorized categories of travel, including for religious, educational, scientific, cultural purposes.
U.S. President Barack Obama makes a speech to the Cuban people in the Gran Teatro de la Habana Alicia Alonso, in Havana March 22, 2016. REUTERS/Jonathan Ernst
The most important Trump initiative is forbidding U.S. companies and individuals from doing business with the state-run conglomerate GAESA (Grupo de Administración Empresarial, S.A.). GAESA, which experts on the Cuban economy say generates as much as 80% of the country’s business revenue, is directed by Luís Alberto Rodríguez, son-in-law of dictator Raúl Castro. The firm’s holdings include retail stores, gas stations, and nearly 60 hotels, and Rodriguez is the gatekeeper to any foreign firm seeking to do business on the island. This vast family-controlled business empire gives the Castro clan a stranglehold over Cuba’s economy, with an aim of dictating the terms of the country’s future.
Even before Trump’s announcements, advocates of the Obama deal strained to find arguments for a policy that produced no political or economic change. One group ventured a guess that trade with Cuba might one day produce thousands of U.S. jobs and billions in U.S. exports—failing to note that U.S. exports to Cuba hover around $20 million per month today, which is about one-third the level before Obama took office. Indeed, a year after Obama surrendered diplomatic recognition and economic concessions without asking for, let alone getting, anything in return, the Cuban government micromanages economic engagement and has increased human rights violations.
Although these Cuba measures are not sweeping, they could have a meaningful impact on choking off revenue to the cash-strapped regime. Another blow to the status quo in Cuba would be a democratic transition in Venezuela—which until recently provided the Castro regime all of the 50,000/barrels per day of oil it needs for domestic demand. The Trump Administration could have a dramatic impact against two hostile regimes if it took more effective measures against the kingpins in Caracas.
Some Trump supporters will say that the specific changes nibble on the edges and will hope for tougher measures. Indeed, this policy shift will only meet its objective if the Administration moves much more quickly to appoint bold policymakers who will implement his agenda with intensity and vigor.
The author was U.S. Ambassador to the OAS and Assistant Secretary of State for Western Hemisphere Affairs from 2001-05. He is a visiting fellow at the American Enterprise Institute, and his firm Visión Américas LLC represents U.S. and foreign clients.
